By Eric Solis
MovoCash
The COVID-19 pandemic disrupted so many lives and presented unprecedented challenges across all industries. As a result, 2020 will undoubtedly go down in history. Fintech, especially digital payments, quickly adapted and embraced the massive surge in demand from consumers pushing us closer to a digital cash society.
Thus, 2021 will be transformative for financial institutions (FIs) as they will be tasked with implementing secure digitized payment solutions that don't disrupt everyday transactions.
This article presents my top five predictions for what is on the horizon for fintech and FIs in the new year.
We have yet to see the full damage that the COVID-19 pandemic has caused. So far, every precaution we have taken to stop the spread of COVID—from wiping down door handles, wearing masks, sanitizing everything we touch, etc.—will not subside any time soon. Further, we are seeing fewer consumers handle actual cash, as it tends to carry the largest pathogens of germs due to the amount of circulation each bill endures through its lifetime.
With the COVID-19 pandemic putting digitization into hyperdrive, we will see much greater use of digital banking technologies across channels and outside the brick-and-mortar environment, eliminating physical cash reliance.
Technologies including artificial intelligence (AI), machine learning (ML) and blockchain have been at the forefront of disrupting the banking industry for years. The pandemic has further exposed the holes in the banking industry as FIs rely heavily on dated legacy systems, leaving them vulnerable to fraud.
This will be the year that banks will be forced to implement a standardized body of regulations to regulate the emergence and use of technologies in digital payments.
AI has been a game changer in the fintech space. We will see a further shift in the implementation of AI in digital payments to create a neural network that intuitively knows how you want to spend your money before you do.
This will only be furthered by geofencing technology, which will track when you enter a store, save a debit/credit card on file for easy automatic payment, and remove the need for cashiers and POS systems.
The financial impact of COVID-19 will continue as businesses struggle to remain open and record numbers of US citizens fall further behind on their bills. On top of this, the rising numbers of COVID-19 cases are forcing people to stay in their homes, as they want to avoid a physical branch location.
As a result, we will see a massive expansion of the underbanked population and the rise of a digital payments economy. This transformation will be a forcing function that will need to remove the high barriers to entry you expect from traditional banking to bring in the underbanked consumer into our economy.
The idea of a global banking system takeover has been gaining traction for quite some time. COVID-19 has further accelerated the creation of a new global banking system that will transform banks into a digital bank platform controlled by a new global currency.
For a global currency to do this, it must be a trackable currency to eliminate fraud. This transformation will open new revenue streams, reduce friction and offer consumers new ways to bank.
The COVID-19 pandemic has expedited the fintech industry's digital transformation. As such, 2021 will be a pivotal year in further adopting technologies like AI, ML and blockchain—leaving no choice for FIs but to implement a body of uniform standards to keep up with emerging technologies and regulate digital payments and currencies.
This will create greater equity and safety in our evolved banking system. I look forward to remaining at the forefront of creating secure digital payment technology solutions that allow implementation alternative payment options and provide consumers new ways to bank.
For more than 15 years, Eric Solis has been a key contributor to the advancement of digital finance, including payments, micro-investing, securities, money transfer systems, transfer agents and record keeping. Today, as founder and CEO of MovoCash Inc., he is combining the best of banking and blockchain through MOVO, a highly secure payment card platform that empowers customers to instantly send and spend money right from a mobile phone, even without a bank account. Contact him via Amanda Miglio at ameglio@rhstrategic.com.
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